Notes

Basic Tendriling Travel Expenses
As business travel expenditures nose upward, companies are realizing that better cost-management techniques may make a distinction

US. corporate travel costs rocketed to a lot more than $143 billion in 1994, according to American Express' newest survey on enterprise travel management. Private-sector employers spend around $2, 484 per employee on journey and entertainment, the 17 percent raise over the earlier four years.

Corporate and business T&E costs, right now the third-largest manageable expense behind sales and data-processing expenses, are under new scrutiny. Corporations are realizing that a savings of one percent or 2 percent can convert into vast amounts extra to their final conclusion.

Savings of that order are certain to get management's attention, which is definitely a requirement for this kind of project. Participation begins with understanding and evaluating the constituents of T&E management in order to be able to control and screen it more effectively.

Hands-on management includes assigning responsibility for travel management, implementing a quality-measurement system intended for travel services applied, and writing plus distributing a formal travel policy. Only 64 percent of Circumstance. S. corporations include travel policies.

Even with senior management's support, the path to savings is definitely rocky-only one throughout three companies offers successfully instituted an internal program that can help cut travel expenditures, and the numerous facets of travel are so overwhelming, the majority of companies don't know how to start. "The sector of travel is usually based on info, " says Steven R. Schoen, originator and CEO of The Global Group Inc. "Until such period as a passenger actually sets foot for the plane, they've [only] been purchasing details. "

If gowns the case, data technology seems the viable place in order to hammer out those elusive, but highly sought-after, savings. "Technological innovations in the particular business travel industry are allowing organizations to realize the particular potential of automation to control and even reduce indirect [travel] fees, " says Roger H. Ballou, us president of the Journey Services Group UNITED STATES of American Show. "In addition, numerous companies are starting on quality courses that include sophisticated process improvement plus reengineering efforts designed to substantially increase T&E management processes and reduce indirect costs. "

Since companies look in order to technology to help make potential savings a new reality, they may get very imaginative in regards to the methods that they employ.

The Good Leveler

Centralized reservation systems were very long the exclusive website of travel companies and even other industry specialists. But all that will changed in Late 1992 when the Department of Vehicles ruling allowed typically the general public access to systems this sort of as Apollo in addition to SABRE. Travel-management application, such as TripPower and TravelNet, immediately sprang up, delivering corporations insight into where their T&E dollars are now being invested.

The software tracks spending trends simply by interfacing with the particular corporation's database in addition to providing access to be able to centralized reservation systems that provide instant reservation information in order to airlines, hotels and car rental agencies. These programs likewise allow users in order to generate computerized traveling reports on price savings with information on where discounts had been obtained, hotel and even car usage and patterns of traveling between cities. Real data gives companies added leverage whenever negotiating discounts together with travel suppliers.

"When you own the particular information, an individual get back to sq one every time you decide to change agencies, inch says Mary Savovie Stephens, travel supervisor for biotech icon Chiron Corp.

Sybase Inc., a client/server software leader together with an annual T&E budget of more than $15 million, agrees. "Software gives us unprecedented visibility into just how employees are spending their travel money and better power to negotiate using travel service providers, " says Robert Lerner, director involving credit and corporate travel services regarding Sybase Inc. "We have better entry to data, faster, in a current environment, which is anticipated to bring all of us big savings in T&E. Now we have manage over our traveling information and zero longer have to depend exclusively about the agencies plus airlines. "

The charge for this freedom depends on the volume of business. One-time purchases of travel-management software can run coming from under $100 in order to more than $125, 000. Some software providers will allow for smaller users by selling software piecemeal for $5 to be able to $12 per reserved trip, still some sort of significant savings through the $50 industry convention per transaction.

You can forget Tickets

Paperless travel is catching upon faster than the particular paperless office ever before did as equally service providers and even consumers work with each other to reduce ticket rates for people who do buiness travelers. Probably the most cutting-edge of the advances is "ticketless" traveling, which almost just about all major airlines usually are testing.

In the particular meantime, travel providers and agencies usually are experimenting with new technologies to allow travelers to guide travel services via the Internet, e mail and unattended ticketing kiosks. Best Traditional western International, Hyatt Resorts as well as some other major hotel chains marketplace on the net. These solutions slow up the need for paper and give better service and so on peripheral benefits as enhanced efficiency, improved monitoring of travel charges and trends, and cost reduction.

Dennis Egolf, CFO regarding the Veterans Extramarital relationships Medical Center within Louisville, Ky., understood that the healthcare center's decentralized location, a quarter-mile from the hospital, produced efficiency difficult. "We were losing creation time and items got lost, " he says. "Every idiota had to be hand-carried for approval, and we all required seven various copies of each travel order. " As a result, Egolf tried an off-the-shelf, paper-reduction software bundle designed for the us government.

The software permits a healthcare facility to control travel on-line, by tracking per-diem allowances and calculating expenditures to generating money advance forms plus authorizing reimbursement vouchers. The software in addition lets the clinic keep an operating account of its travel expenses as well as remaining travel budget.

"Today, for all practical purposes, the program is paperless, very well says Egolf. The software has assisted the hospital reduce document processing time frame by 93 percent. "The original target focused on handling employee travel with no paper, " he or she says. "We include achieved that aim, in part credited to the efforts of the staff plus in part because of the accuracy of the particular software. "

Using just a $6, 500 investment, the clinic saved $70 each and every employee trip and even saved almost half of its $200, 000 T&E budget through the paper-reduction program.

Out Generally there

Consolidation of corporate travel arrangements simply by fewer agencies is a huge growing trend considering that 1982. Nearly a few out of four companies now create travel plans for their business areas through a solitary agency as contrary to 51 percent found in 1988. Two significant benefits of company consolidation are the particular facilitation of construction and T&E cash strategy, as well while leverage in discussing future travel savings.

A major technological improve which allows this loan consolidation trend to blossom will be the introduction of satellite ticket ink jet printers (STPs). Using STPs enables a vacation agency to merge all operations to one home business office, and still send just about all necessary tickets in order to various locations quickly via various cable services. As being the phrase implies, the equipment prints out aircarrier tickets on-site right away, eliminating delivery fees.

For London Fog, STPs are the blessing. London Fog's annual T&E budget of more than $15 thousand is split every bit as between its a couple of locations in Eldersburg, Md., and Innovative York City. Each location purchases the identical number of tickets, so equal gain access to to ticketing by their agency is important. With an STP BROKER in their two areas, the company services the two offices with a single agency in Baltimore. Each office provides entry to immediate ticket but still manages to be able to save by not necessarily having to spend courier and communicate mail charges of which can range upwards to $15 for every of the even more than 500 entry pass each purchases yearly.

Conde Nast Publications' annual T&E spending budget of more as compared to $20 million is allocated among its locations in Mis Angeles, San Francisco, Chicago, New York in addition to Detroit. Since 1994, travel arrangements need been handled by simply a centralized company, Advanced Travel Supervision in New York City, by putting in an STP inside of each of these types of five locations. In addition to improved efficiency due to be able to consolidation, Conde Nast now has the ability to change traveling plans at some sort of moment's notice plus have new seat tickets in hand quickly.

The real advantage is that the machines usually are owned and maintained from the travel organization., so you cannot find any price to the firm. Due to the major expense engaged, however, STPs stay an option only for major ticket buyers. "STPs are a new viable option inside this process regarding any location that will purchases more compared to $500, 000 per year in entry pass, " says Shoen.

As airfare averages 43 percent of any company's T&E expenses, savings readily available through the several uses of technologies have become spectacular. For example , the potential of corporations to collect and analyze their own traveling trends has led to the design of net-fare purchasing-negotiating a price involving a corporation and a great airline to obtain tickets that does not contain the added costs of commissions, overrides, transaction fees, organization transaction fees and also other discounts.

Although most major U. H. carriers publicly announce that they don't negotiate corporate discount rates below published industry fares, the United states Express survey about business travel managing found that 38 percent of Oughout. S. companies acquired entry to, or currently had implemented, discussed airline discounts. Typically the availability and mechanics of these preparations vary widely by carrier.

What's the retail price?

Fred Swaffer, travel manager for Hewlett-Packard and a strong advocate of typically the net-pricing system, has got pioneered the concept of fee-based pricing with travel-management companies under contract with H-P. He states that H-P, which spends more than $528 million per year upon T&E, plans to be able to have all air travel based in net-fare pricing. "At this current time, we all have several net fares at several stages of arrangement, " he says. "These fares are negotiated with the flight companies at the company level, then drip down to each associated with our seven physical regions. "

Honest Kent, Western regional manager for Combined Airlines, concurs: "United Airlines participates inside corporate volume discounting, such as bulk ticket purchases, but not with online pricing. There are but to see a single net-fare agreement that makes sense to all of us. We're not against it, but many of us just don't recognize it right at this point. "

Kent challenges, "Airlines should technique corporations with long lasting strategic relationships rather than just savings. You want to notice ourselves committed to a new corporation rather compared to just involved. very well

As business travel expenses nose up, companies are seeing that better cost-management approaches can make a difference.

US. company travel expenses rocketed to more than $143 billion in year 1994, according to United states Express' most the latest survey on enterprise travel management. Private-sector employers spend a good estimated $2, 484 per employee upon travel and amusement, a 17 percent increase over the past several years.

Corporate T&E costs, now typically the third-largest controllable cost behind sales and data-processing costs, will be under new overview. Corporations are realizing that even a savings of 1 percent or 2 percent can translate into millions involving dollars included in their very own bottom line.

Cost savings of that buy will definitely get management's attention, which will be a requirement intended for this kind of project. Engagement begins with understanding and evaluating typically the components of T&E management to be able to manage and monitor it more effectively.

Hands-on management includes assigning responsibility for travel management, implementing some sort of quality-measurement system with regard to travel services used, and writing in addition to distributing an official travel policy. Simply 64 percent involving U. S. businesses have travel plans.

Despite having senior management's support, the path to savings is definitely rocky-only one in three companies has efficiently instituted an internal plan that will help cut travel expenses, and the myriad aspects of travel are usually so overwhelming, normally don't know wherever to start. "The industry of vacation is based on information, " claims Steven R. Schoen, founder and CEO of The Worldwide Group Inc. "Until such time like a passenger actually pieces foot on the plane, they've [only] been purchasing information. inches

In that case, information technology seems a viable place to hammer away those elusive, yet highly sought-after, personal savings. " get more info in the industry travel industry usually are allowing firms to understand the potential associated with automation to regulate and reduce indirect [travel] charges, " says Roger H. Ballou, leader of the Vacation Services Group US of American Express. "In addition, many companies are trying to achieve quality programs including sophisticated process improvement and even reengineering efforts made to substantially improve T&E management procedures and reduce roundabout costs. "

While companies look to be able to technology to create possible savings an actuality, these people can get very creative about the methods they utilize.

The truly great Leveler

Central reservation systems were long the unique domain of travel agents and also other sector professionals. But most that changed in November 1992 every time a Department of Transport ruling allowed the general public access to devices like Apollo plus SABRE. Travel-management computer software, like TripPower and TravelNet, immediately sprang up, providing corporations regarding where their own T&E dollars are being spent.

The particular software tracks shelling out trends by interfacing with the businesses database and offering use of centralized booking systems that offer immediate reservation information to airlines, hotels and carrental agencies. These programs likewise allow users in order to generate computerized vacation reports on cost benefits with details on where discounts were obtained, hotel plus car usage and patterns of journey between cities. Actual data gives organizations added leverage any time negotiating discounts using travel suppliers.

"When you possess the data, you don't include to go back to pillow one every time you choose to change companies, " says Mary Savovie Stephens, journey manager for biotech giant Chiron Corp.

Sybase Inc., some sort of client/server software leader with an yearly T&E budget regarding more than $15 million, agrees. "Software gives us unparalleled visibility into just how employees are wasting their travel money and better influence to negotiate using travel service suppliers, " says Robert Lerner, director of credit and business travel services regarding Sybase Inc. "We have better accessibility to data, more quickly, in a timely environment, which will be expected to bring us big savings throughout T&E. Now all of us have control over our own travel information plus no longer must depend exclusively around the agencies and air carriers. "

The cost for this privilege is dependent on the amount of business. One-time acquisitions of travel-management software program can run through under $100 to be able to more than $125, 000. Some application providers will allow for smaller users by selling software piecemeal for $5 in order to $12 per reserved trip, still an important savings from the $50 industry tradition per transaction.

Not any More Seat tickets

Paperless travel is getting on faster compared to the paperless office ever before did as equally service providers and even consumers work with each other to reduce ticketed prices for enterprise travelers. Perhaps typically the most cutting-edge involving the advances will be "ticketless" travel, which usually almost all key airlines are screening.

Meanwhile, travel services and agencies are usually tinkering with new solutions to allow travelers in order to book travel companies on the net, e-mail plus unattended ticketing kiosks. Best Western Cosmopolitan, Hyatt Hotels and several other key hotel chains promote on the Internet. These services decrease the requirement for report and offer much better service and this kind of peripheral benefits while increased efficiency, superior tracking of vacation expenses and developments, and cost reduction.

Dennis Egolf, CFO in the Veterans Affairs The hospital in Louisville, Ky., realized that will the medical center's decentralized location, the quarter-mile through the clinic, made efficiency tough. "We were burning off production time and points got lost, inch he says. "Every memo had to be able to be hand-carried regarding approval, and necessary seven different duplicates of each journey order. " Because of this, Egolf tried a good off-the-shelf, paper-reduction software program designed for the particular federal government.

The software program allows the medical center to deal with travel online, from tracking per-diem allowances and establishing expenses to generating cash loan forms plus authorizing reimbursement vouchers. The software also enables a healthcare facility keep the running account involving its travel charges and its outstanding travel budget.

"Today, for all practical purposes, the method is paperless, inch says Egolf. check here has assisted the hospital decrease document processing time by 93 percent. "The original objective aimed at managing employee travel without document, " he says. "We have attained that goal, throughout part due to the efforts involving the staff and in part due to be able to the accuracy regarding the software. inch

With only a new $6, 000 investment decision, the hospital saved $70 each employee trip and saved almost 50 % of its $200, 000 T&E finances throughout the paper-reduction program.

On the market

Consolidation regarding corporate travel plans by fewer organizations has been the growing trend given that 1982. Nearly a few out of four companies now make traveling plans for their business locations by way of a single agency as opposed to be able to 51 percent in 1988. Two major great things about agency consolidation will be the facilitation of construction and T&E spending budget, as well while leverage in settling future travel discount rates.

A major scientific advance that allows this consolidation pattern to flourish is the introduction involving satellite ticket ink jet printers (STPs). Using STPs enables a journey agency to merge all operations to one home office, and even still send just about all necessary tickets to various locations quickly via various wire services. As the particular term implies, the particular machinery prints out and about flight tickets on-site quickly, eliminating delivery expenses.

For London Fog, STPs are some sort of blessing. London Fog's annual T&E price range of more as compared to $15 million is usually split equally between its two places in Eldersburg, Maryland., and New York City. Each place purchases the exact same variety of tickets, therefore equal access in order to ticketing from their company is a have got to. Having an STP inside their two locations, the company providers both offices along with one agency throughout Baltimore. Each workplace has access to be able to immediate tickets and still manages to save by devoid of to pay courier and express email charges that can easily range up to $15 for each with the more than five-hundred tickets each purchases annually.

Conde Nast Publications' annual T&E budget of even more than $20 mil is allocated between its locations found in Los Angeles, San Francisco, Chicago, Fresh York and Detroit. Since 1994, journeys have been dealt with by way of a centralized company, Advanced Travel Management in New York City, by setting up an STP found in each of these kinds of five locations. Inside of addition to elevated efficiency due in order to consolidation, Conde Nast now has to be able to change travel ideas at a moment's notice and have new tickets throughout hand instantly.

The true benefit is that will the machines are generally owned and preserved by the travel company., so there is no cost in order to the company. Because of the major expense included, however, STPs continue to be an option simply for major ticketed purchasers. "STPs usually are a viable option in this process for virtually any location that purchases more compared to $500, 000 per year in entry pass, " says Shoen.

As airfare uses 43 percent of any company's T&E expenses, savings accessible through the various uses of technology are getting to be dramatic. With regard to example, the ability of corporations to gather and even analyze their very own vacation trends has led to the particular creation of net-fare purchasing-negotiating a cost in between a corporation and an airline to get tickets that will not are the extra expenses of commissions, overrides, transaction charges, agency transaction service fees and other special discounts.

Although most key U. S. service providers publicly proclaim which they don't negotiate corporate and business discounts below printed market fares, the particular American Express study on business traveling management found that will 38 percent involving U. S. companies had access in order to, or already had implemented, negotiated air travel discounts. The accessibility and mechanics associated with these arrangements differ widely by company.

What's the Selling price?

Fred Swaffer, vehicles manager for Hewlett-Packard and a strong counsel with the net-pricing method, has pioneered the concept of fee-based pricing with travel-management companies under agreement with H-P. He or she states that H-P, which spends a lot more than $528 million annually on T&E, blueprints to have almost all flights based in net-fare pricing. "At the present moment, we have a number of net fares from various stages involving agreement, " he or she says. "These costs are negotiated using the airlines on the corporate level, and then trickle down to all of our seven geographical regions. "

Frank Kent, Western territorial manager for United Airlines, concurs: "United Airlines participates in corporate volume discounting, such as bulk solution purchases, but certainly not with net prices. I have but to see one net-fare agreement that makes sense to be able to us. We're certainly not opposed to that, but we only don't understand it right this moment. "
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